In climate policy discussions, the issue of emissions âoffsetsâ is a contentious topic. Offsets allow the use of forestry, land-use management practices, and some industrial practices to substitute for reductions in emissions of greenhouse gases. In the absence of offsets, the estimated costs to the US economy of complying with climate stabilization goals are significantly larger.

Policy initiatives in the United States and in international climate discussions include a focus on the design and regulation of offsets. Of concern are measurements to establish baselines, monitor changes, support trading markets, and monitor leakages. Solutions to these problems may hinge in large part on the role of Earth observations. This role includes a need for Earth science research as well as the use of that knowledge in policy and management. This presentation will discuss answers to the most frequently asked questions about offsets.

- What are offsets and why have they become prominent in US climate policy?
- What are the proposed legislative provisions for offsets?
- What do we know about the supply curve of offsets?
- What are issues in including offsets in US policy? in international policy?
- Do the European Union Trading System and Chicago Climate Exchange allow offsets?
- What are voluntary offset markets and what can we learn from them?
- What accuracy and precision are required in estimating offset supply?

Molly Macauley is a Senior Fellow and Research Director at Resources for the Future (RFF). RFF is a research organization established in 1952 to address the economics of natural resources and their strategic value.